In the month of November, the residential property market did very well due to an increase in house building across Britain. Ever since the UK EU membership referendum in 2016, there has been a lot of uncertainty in terms of Brexit surrounding plans for many aspects of the UK both socially and economically.
In particular, the construction sector has experienced a lot of ambiguity over other industries because of the nature of the industry. Many construction projects will take years to complete. As well as this, there has been an ongoing housing shortage in the UK due to the fast-growing population. On top of that, UK housing prices may be affected by the time Brexit has complete.
There are many precautions that the construction sector has to take because it is more sensitive to the UK referendum, but one of the main factors for builders, developers and investors to consider is that businesses need to forecast the value and demand of houses as well as commercial office buildings in a few years’ time when the building is finished rather than now.
A survey done by the IHS Markit on the construction purchasing managers’ index stated that figures rose from 50.8 in October to 53.1 in November. This is a very positive figure as economists had forecast a analysis of 51 and anything above 50 means that there has been an expansion.
The Purchasing Managers’ Index (PMI) found that the sector is appearing to regain momentum and has grown during final quarter of 2017. This is a good improvement from the beginning of the year due to sector experiencing dips for two following quarters. This is because of the fact that some large commercial projects that took place in the UK completed without new projects replacing them.
The Help To Buy Scheme has also helped the residential property sector this year by supporting the demand and supply of new housing for UK residents. Although the residential sector is showing signs of improvement, the commercial sector is seeing dips due to less civil engineering and commercial construction work taking place.
Only time will tell how the Help To Buy scheme will improve the sector and if Brexit will have a detrimental effect on the construction industry.